Interim relief granted in challenge to Rule 44A on CENVAT Credit for gold imports

The Court granted interim relief to the petitioners challenging an impugned Notification inserting Rule 44 A in the Central Goods and Services Rules, 2017, which required the reversal of CENVAT Credit on imported gold dore bars. The Court acknowledged a prima facie case in favor of the petitioners and directed that no coercive steps be taken to recover the credit until the next hearing date scheduled for 25th September 2017.

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Issues: Challenge to impugned Notification inserting Rule 44 A in CGS Rules requiring reversal of CENVAT Credit on imported gold dore bars.

The judgment pertains to a challenge against an impugned Notification dated 17th August 2017, which inserted Rule 44 A in the Central Goods and Services Rules, 2017 (CGS Rules). The petitioners contested the insertion of this rule, which mandated the reversal of 5/6th of the CENVAT Credit accrued to them due to the payment of additional duty of customs on imported gold dore bars. The petitioners argued that they had fulfilled all conditions for the credit and that the impugned Notification was discriminatory and unreasonable, imposing higher tax burdens on imported gold dore bars compared to other goods. The petitioners sought interim relief to prevent the reversal of the credit already availed. The Court acknowledged a prima facie case in favor of the petitioners and granted interim relief, directing that no coercive steps be taken to recover the credit until the next hearing date. The Court scheduled further filings and listed the matter for a hearing on 25th September 2017.

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